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E&O is not expecting a strong recovery until the pandemic eases

Eastern & Oriental Berhad (E&O) says the performance of its property development and hotel divisions remain subdued in the current climate of uncertainty and flux.

“Market sentiment is weak and challenging conditions persist. The group is not expected to make a strong recovery until the (Covid-19) pandemic eases and movement control order (MCO) restrictions, both locally and internationally, are relaxed,” it said in a statement today.

E&O’s revenue declined by 57.6 per cent to RM165.5 million for the third quarter ended December 31, 2020, as compared to the corresponding period last year.

The lifestyle developer attributed this to lower revenue generated from the properties segment, it said in a filing with Bursa Malaysia.

The properties segment recorded revenue of RM150.8 million, down 55.6 per cent or RM188.6 million from RM339.4 million recorded in the previous financial period ended December 31, 2019.

The decreased revenue was mainly due to lower revenue recognition from the group’s Seri Tanjung Pinang Phase 2A (STP2A) land reclamation and lower sales of completed properties in STP.

E&O said its joint venture projects namely The Mews, Conlay, and Avira Garden Terraces contributed a total revenue of RM39.3 million during the period, down 41.8 per cent or RM28.2 million from the same period a year ago.

In line with the lower revenue recorded, the group recorded a pre-tax profit of RM22.4 million for the financial period ended December 31, 2020, as compared to RM33.8 million a year before that.

The group’s hospitality segment registered revenue of RM13.2 million as compared to RM47.3 million in the financial period ended December 31, 2019.

This marked a decrease of RM34.1 million or 72.1 per cent mainly due to the Covid-19 pandemic that severely impacted the tourism, travel, and hospitality industries, it said.

Going forward, E&O is focusing on the fully reclaimed 253-acre Phase 2A, where infrastructure works are being laid for an innovative and integrated waterfront destination.

Source: NST